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The Federal Treasurer has signalled changes to superannuation tax might form part of the Government’s plans for reform.
Scott Morrison has already said changes to superannuation are being considered, and today he took it further, indicating he is interested in a Deloitte Access Economics proposal to make higher income earners pay more on their superannuation contributions.
“The Government is looking at a range of issues on superannuation and I have been very clear on this for some time,” Mr Morrison said.
“What we are seeking to do with superannuation is ensure that people are independent in their retirement and that the tax incentives that are applied to superannuation are ones that best put Australians who are at risk of not being independent in retirement in a strong position,” he said.
Deloitte Access’s Chris Richardson argues the better-off get a big tax advantage from their super contributions because most people pay the same 15 per cent tax.
Mr Richardson’s proposal is for people to pay their normal income tax rate but with a 15 per cent discount, saying it would save the Government $6 billion in 2016-17, or enough to cut the company tax rate from 30 per cent to 26 per cent.
News Corp reports finding a fairer way to encourage retirement savings has been moved to the top of Malcolm Turnbull’s tax agenda, with the Government stepping up work on how it might be implemented.
Mr Morrison pointedly said tax incentives need to be targeted.
“I’ve talked about the need for greater flexibility over people’s working lives, I’ve talked about the need to make sure those tax incentives are targeted,” Mr Morrison said.
Labor’s superannuation spokesman, Jim Chalmers, stood by the ALP plan on retirement savings, which focuses more on lifting the taxes on earnings.
“For some time now … we’ve put on the table a plan, a comprehensive plan, to fix the unfairness in the superannuation system, to raise something like $14 billion over 10 years,” Mr Chalmers said.
“There’s an already-costed, considered plan to fix the superannuation system.”
Federal Government delays tax discussion paper to 2016
The Federal Government has quietly pushed back the release of its next discussion paper on its potential tax overhaul until next year.
A tax green paper was due sometime after June this year, but Mr Morrison today said the Government was working to a new timeline.
“We’ll be putting a green paper out on these and other related issues next year, because remembering this is a package about how you grow the economy — not just how you might seek to change the tax system,” he said.
Mr Morrison said there was no rush for the Government to speed up the process.
“There’s a budget next year, there’s a green paper we would be looking to release next year,” Mr Morrison told AM.
“There are other iterations in this process, but I don’t understand where the rush is here, whether it’s from the Labor Party or the media.
“I recall in New Zealand, when they went down this process, they respected the New Zealand public by allowing them in the discussion that went for almost a year.
“Now I’m not proposing that is necessarily where the Government is going.”
Labor’s assistant treasury spokesman, Andrew Leigh, said the delay “confirms that the entire past two years have been wasted”.
“This decision means the Government will now go into its third year in office without having even released its ideas on tax reform, let alone a real plan,” Dr Leigh said.
The delay takes one report off the Treasurer’s table for what shapes as a busy final two months of the year.
He is due to release a mini-budget — the Mid-year Economic and Fiscal Outlook — and respond to the Harper competition policy review, while he is also contributing to the Government’s innovation statement.